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Income and Taxes
| Term | Definition |
|---|---|
| Bi-Weekly | done, produced, or occurring every two weeks or twice a week |
| Dependent | requiring someone or something for financial support |
| Direct Deposit | an electronic transfer of a payment directly from the account of the payer to the recipient's account |
| Earned Income | money derived from paid work |
| Employee | a person employed for wages or salary, especially at nonexecutive level |
| Employer | a person or organization that employs people |
| Exemptions | the process of freeing or state of being free from an obligation or liability imposed on others |
| Federal Income Tax | the tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities |
| FICA | Federal Insurance Contributions Act taken out of your paycheck helps fund both Social Security and Medicare programs |
| Fringe Benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance |
| Gross Income | represents the total income from all sources, including returns, discounts, and allowances, before deducting any expenses or taxes |
| Hourly Wage | pay that a person earns based on a set hourly rate |
| Income Tax | tax levied by a government directly on income, especially an annual tax on personal income |
| Medicare Tax | a federal employment tax that funds a portion of the Medicare insurance program |
| Net Income | sales minus cost of goods sold, general expenses, taxes, and interest |
| Overtime Pay | money earned at an increased rate for working more than the usual number of hours in one week |
| Profit Sharing | a system in which the people who work for a company receive a direct share of the profits |
| Salary | a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee |
| Sales Commissions | is the percentage of the value of a sale that a sales associate or sales representative may earn |
| Social Security Tax | the tax levied on both employers and employees to fund the Social Security program |
| Tax Deduction | a deduction that lowers a person's or an organization's tax liability by lowering their taxable income |
| Tips | A gratuity is a sum of money customarily given by a client or customer to certain service sector workers for the service they have |
| W2 Form | reflects your income earned and taxes withheld from the prior year to be reported on your income tax returns |
| W4 Form | an Internal Revenue Service (IRS) tax form that is filled out by employees to indicate their tax situation to their employer |
| Withholding | the amount of an employee's pay withheld by the employer and sent directly to the government as partial payment of income tax |
Created by:
eschneider22
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